As NASA steps down from spaceship and rocket development, the private sector is stepping up. Can business revive the old spirit of adventure?

There is a bright blue sky over Denver, and Mark Sirangelo is eager to fly. A 50-year-old engineer with short black hair, a buttoned gray shirt, and dark slacks, Sirangelo strides into a small hangar just outside downtown. A few helicopters wait inside, including a cherry-red one that looks like something out of a giant Lego set.

But Sirangelo has not come for any of these. He heads to a strange, white-and-black ship parked in the corner, one that looks like a giant prop from a science fiction movie. Measuring about 30 feet long by 20 feet wide, it has two sweeping wings near the back and a wide, curving window over the nose. The words “Dream Chaser” are printed on the side in sky blue near a golden arc, an American flag, and a NASA logo. The big ship is so odd that when Sirangelo nears, a tanned pilot at one of the copters drops what he’s doing and jogs over to ask what the heck it is. “It’s a spacecraft,” Sirangelo replies with an evasive smile.

As that smile hints, his answer is truthful but wildly incomplete. The Dream Chaser is the creation of the Sierra Nevada Corp., an electronic systems manufacturer in Sparks, Nevada. For more than 20 years, the company’s space exploration department has helped build technologies ranging from handheld rocket motors to communication satellites. Under the guidance of Sirangelo, it is now taking on a far more ambitious project. By 2014 the Dream Chaser could make its first orbital flight, and shortly thereafter it could be routinely ferrying up to seven people into low Earth orbit—on a visit to the International Space Station, for instance.

That is where the NASA logo on the side of the ship comes in. The Dream Chaser is the most tangible product of the space agency’s controversial new mission: privatizing space exploration. Ever since its birth in 1958, NASA has been synonymous with America’s manned space program, from the triumphs of the Apollo missions to the disasters of the space shuttles Challenger and Columbia. That all changed in February, when President Obama proposed an end to the $100 billion Constellation program, whose goal was to create the spacecraft and rockets needed to take humans back to the moon and beyond. With the space shuttle program already slated to wind down by early 2011, NASA will soon have no ability to send humans into space on its own. Instead, it is turning to entrepreneurs like Sirangelo to do the job.

To stimulate the nascent private space industry, Obama has requested that $6 billion of NASA’s budget over the next five years be directed to space tech development. Earlier this year, Charles Bolden, NASA’s administrator, put a small but symbolically significant bet on the table, awarding $50 million from the American Recovery and Reinvestment Act of 2009 (better known as the stimulus act) to private spacecraft developers, whom he called “the faces of the new frontier.” These faces run from established players like Boeing to brash start-ups like Blue Origin, launched by Amazon.com founder Jeff Bezos. Sierra Nevada was a big winner, receiving $20 million for the Dream Chaser project. The Obama plan is to create a diverse industry of taxi fleets that will transport cargo and crew to low Earth orbit, both for NASA and for commercial enterprises such as satellite companies or space tourism.

The administration’s move has sparked a battle not just for contracts but for the soul of the space program. NASA sees privatization as crucial to addressing the chronic mismatch between the agency’s grand plans and its modest budget. “At NASA we need to focus our resources and priorities on conquering the hardest challenges in space—moving on to the moon, Mars, and the rest of the solar system,” says Alan Lindenmoyer, Commercial Crew and Cargo program manager at the Johnson Space Center in Houston. “This is a great opportunity to count on the skills of American ingenuity to take on the task of routine access.”

But many politicians and pundits do not trust that private companies can get the job done safely and effectively. Their concerns range from the technological challenges to the economics of putting people into space: If NASA downsizes, where will the money come from to finance the development of a whole new industry? And if other customers do not materialize, can NASA alone keep that industry afloat? The attacks have been especially swift and sharp from senators Barbara Mikulski (D-MD) and Richard Shelby (R-AL), who represent states that currently get substantial NASA investment, as well as from former Apollo astronauts Neil Armstrong and Eugene Cernan. Armstrong called the cancellation of Constellation "devastating." More surprising, even major aerospace companies have expressed doubt. John Karas, vice president and general manager of human spaceflight at Lockheed Martin, recently declared, “I don’t think there is a business case for us.”

“I don’t believe this was the right way to go at this time, as it places an incredible amount of pressure on private companies,” says Scott Pace, director of the Space Policy Institute at George Washington University in Washington, D.C. “They say they’re up to it, and I hope they are, but government policy should not be so reliant on private business plans.”

And yet Sirangelo continues to smile. He is not worried about the pressure to succeed. From his point of view, he is already doing it.

Sirangelo’s dream began in 2004, when President George W. Bush announced that NASA would be phasing out the space shuttle program at the end of the decade. In that plan, however, the next-generation rockets and space capsules (which evolved into the Constellation program) would not be ready until 2015. The gap meant that the United States would soon—for the first time in three decades—have no spacecraft that could move people and cargo into Earth orbit. Relying solely on Russian Soyuz spacecraft to fly Americans to the International Space Station would be expensive—and tenuous, should relations with Russia ice over. “We all knew the shuttle would stop flying, but what wasn’t clear was the solution,” Sirangelo says.

Sirangelo, who began his aeronautical journey as a crop duster, spent a year combing for answers. Then he found a file buried in NASA’s public records. In the early 1980s, he read, an Australian pilot spotted something unusual floating in the Indian Ocean. The pilot snapped a few photos, which revealed a Russian trawler hoisting a small, futuristic craft out of the water. The grainy black-and-white pictures eventually wound up in the United States, where officials knew exactly what it was: the BOR-4.

BOR is a Russian acronym for unpiloted orbital rocket plane; the Russians built the experimental craft in response to the then-new U.S. space shuttle program. In a bit of one-upmanship, NASA’s Langley Research Center in turn began developing the HL-20, a craft that could take off and land horizontally and reach low Earth orbit. Such vehicles, capable of making multiple flights, are called reusable lifting bodies (a lifting body being a craft that generates lift from its fuselage rather than from wings). “NASA was looking at the HL-20 as a candidate for a crew rescue vehicle,” Lindenmoyer says. “At one point we considered it a possible replacement of the shuttle.”

This idea was shelved after nearly 10 years of development, and NASA agreed to use the Russian Soyuz capsule as the rescue vehicle for the space station. But now, reviewing NASA’s records, Sirangelo thought that the HL-20’s time had come. In addition to having the reusability and features of a small space shuttle, the craft already had two decades of research and development behind it. Moreover, the HL-20 was able to move quickly from orbit to a gentle touchdown, meaning that it should be both inexpensive and flexible. Sirangelo saw that he could create a new design, inspired by NASA’s innovations of the past but built for the private future.

He needed a name, and that came to him quickly: the Dream Chaser. “We were chasing our dreams,” he says. “What we’re trying to do is manifest for ourselves that it is possible to do something like this. You don’t have to be a major global corporation. A group of talented people working hard and using creativity could follow their dream and make this work out.”

Painfully aware of the looming break in America’s space capabilities, NASA had already begun making plans to seed the commercial spaceflight business. In 2006 it ran a $500 million competition to develop cargo transport solutions for servicing the International Space Station. The station would need supplies, and NASA was laying the groundwork for a new way of moving cargo and crew. This was Sirangelo’s chance to make a case for his lifting-body design. He advanced to the semifinals, along with five other notable private contractors, including entrepreneur Elon Musk’s SpaceX.

The Dream Chaser ultimately lost the award to SpaceX and an Oklahoma City–based company called Rocket­plane Kistler, which in turn lost its contract after failing to meet NASA’s performance milestones. Rocketplane’s failure underscores how ambitious companies can get eaten alive by the difficulty of commercial spaceflight. “At that point people said, ‘You’re silly for keeping this going; it’s never going to happen,’” Sirangelo recalls. The expectation was that NASA would keep the space cargo business for itself. But the commercial industry continued to push for new opportunities, urging Congress and NASA to pursue another competition, this one for crew transportation to the International Space Station. Last year nearly 40 commercial teams competed for a piece of the $50 million prize. The $20 million awarded to Sierra Nevada’s Dream Chaser design was the single biggest chunk of the money, a big validation of Sirangelo’s vision. It was time to build.

Next page: Experiencing the wonders of space—safely

Every new astronaut experiences The Moment, and Jim Voss will never forget his. It was November 1991, and the veteran NASA engineer was aboard the Atlantis shuttle to deploy a defense satellite and conduct experiments. The crew had gotten into orbit, and Voss was busy going through his prepared routine.

Just as he was floating up to the flight deck, he happened to glance out the window and—bam!—he saw it: this huge and incredible bright blue planet against the blackness, Earth. Voss froze. “It just grabbed me,” he says. “I watched it go by for I don’t know how long. I had dreamed about doing that for so long. And now I want to keep that dream alive.”

When Voss, now the vice president of space exploration systems at Sierra Nevada and program executive of the Dream Chaser, tells this story, it’s not just a former astronaut getting misty. It illustrates what people are really talking about when they discuss the future of NASA: the majestic promise of spaceflight, and who gets to fulfill it. In the past, people took comfort (rightly or not) in thinking that NASA had everything under its own control. But the government is not in the space business by itself anymore. NASA’s reliance on commercial industry means that the agency cannot get to the finish line alone, or even just with the Russians. Instead it must work with the private developers to maintain both integrity and safety.

This requires people like Sirangelo—who chairs the Commercial Spaceflight Federation, the industry’s association—to be part engineer, part salesman. The $50 million in seed money from NASA is just the first step. “It’s a kick-start, some level of guarantee of usage,” says Voss, who compares this stage of private spaceflight to the early days of the aviation industry. “No one knows what the regulations will be. No one knows what the rules will be. It’s not that we haven’t been to space, it’s just all been government controlled.”

So far NASA is hedging its bets, spreading out money to a variety of companies, each of which is creating a different kind of vehicle or program. The Dream Chaser is the only lifting body design in the competition to build a new crew vehicle. But there are six other companies in the mix. One notable is SpaceX, which is pursuing a capsule design somewhat like the one that carried the Apollo astronauts.

Before any of that private hardware takes flight, NASA and its new corporate partners must address the biggest issue: keeping the next generation of astronauts safe. Although there have been a handful of fatalities involving the Soyuz (most recently in 1971), it comes with a flight heritage of more than 100 successful missions. As Scott Pace puts it, “That heritage doesn’t yet exist with these commercial firms.” Texas congressman Pete Olson, the ranking Republican on the House Space and Aeronautics Subcommittee, echoes this refrain. “NASA has to prove, before we put a human in it, that it has a vehicle that’s safe and reliable,” he says. “We have to give the astronaut the ultimate chance to come home.”

NASA expresses confidence that commercial companies are up to the job. “We expect them to be as safe as anything we’d build and fly ourselves,” Lindenmoyer says. “Before you put a human being, certainly a NASA crew member, on board, you have to have met those standards for safety.” The companies will manage their own designs, he notes, but they are not getting paid in advance. In order to receive money from NASA, they have to meet various milestones.

“NASA is not abandoning its role,” Sirangelo says. “It’s our boss. Safety standards have to be met. The notion that our vehicle would be less safe because it’s coming from a commercial company is ludicrous.” He particularly bristles at the idea that his company is untested: “The idea that we are start-up people in a garage is just not true. We are a qualified space company with a long history. The only difference is the approach to the work being done.”

President Obama made a similar point in a speech at the Kennedy Space Center last April 15. “Now, I recognize that some have said it is unfeasible or unwise to work with the private sector in this way,” he said. “I disagree. The truth is, NASA has always relied on private industry to help design and build the vehicles that carry astronauts to space, from the Mercury capsule that carried John Glenn into orbit nearly 50 years ago to the space shuttle Discovery currently orbiting overhead.”

Indeed, companies like Sierra Ne­vada have been developing space­craft and satellites for NASA for decades. But the nature of that relationship is fundamentally changing. In the past NASA was calling the shots: overseeing the design of a system, then owning and operating it once all the parts were complete. Now the roles have changed, with NASA assuming the position of a vested buyer.

“This is a partnership, with NASA as the lead investor and the company as the owner and operator of these systems,” Lindenmoyer says. “We’re not providing the specifications for designing these systems. What we are providing is a set of goals and objectives. We’re saying, ‘Hey, we’re a very interested customer, but we’re not trying to stimulate a system that’s good only for government use. We want to see systems that are cost effective, that can open new markets for space, and that are good for the economy.”

Next page: How to make a dream-chaser

The Dream Chaser is being engineered inside a sprawling set of warehouses in an industrial park in Louisville, Colorado, just off winding roads lined with handsome suburban homes. This is one of the 35 locations of Sierra Nevada, which has more than 2,000 employees and annual revenue in excess of $1 billion.

The company has been a huge but relatively quiet player in space exploration. It helped build the Mars Pathfinder, as a signed poster of the spacecraft attests. Sierra Nevada boasts that its technology has been to Mars more times than any other company’s. Overall it has participated in more than 300 space missions, providing everything from Internet-controlled microsatellites to hybrid propulsion systems and space vehicles. The company even created the hybrid rocket system that put the first private spacecraft, SpaceShipOne, into outer space in 2004.

A wall-mounted display in the lobby holds several rows of champagne corks, each one popped after a successful Sierra Nevada mission. They ran out of room many years ago. There are several American flags decorating the facility. Guys with ponytails and Harley-Davidson T-shirts test equipment in big machines named whimsically after famous musicians: Elvis, Ray Charles. But there is no sight of the Dream Chaser amid the satellite parts. The only clue is in the far back, where four tall, makeshift walls of beige curtains shroud the work from prying eyes. “This is a competitive business,” Sirangelo explains.

In fact, until this interview with DISCOVER, Sierra Nevada has kept its plans largely under wraps. Other competitors building rockets and capsules, like Blue Origin, are likewise remaining quiet about their prospects. With future funding at stake, no company wants the others to know what it is doing. But as the competitors work on proprietary technology and design, they also recognize the need to begin publicly addressing safety concerns.

“The technology challenges for a lifting body are probably a bit greater than for a capsule,” says Ken Bowersox, a former astronaut now working for SpaceX. “If you get in a situation where you have trouble controlling attitude, where your vehicle goes upside down and the wings pull you down into thicker air sooner—which can cause the vehicle to be overloaded—that’s what I worry about with wings.”

The Dream Chaser team touts the craft’s advantages: its reusability, its horizontal landings (as opposed to the Soyuz-style parachute landings for a space capsule), and the reliability of the Atlas V rocket booster that will put it into orbit.

Getting from a prototype in Louisville to a fleet of Dream Chasers shuttling astronauts into space will depend on achieving what Lindenmoyer calls “a pre-negotiated set of milestones.” In other words, once each of the prospective crew vehicles passes certain flight and safety tests, the companies will get more money, an arrangement called pay-for-performance. “It’s certainly very motivating,” Lindenmoyer says. “We’re working right now to take NASA’s 50 years of human spaceflight and consolidate that experience into documentation that can be used by these commercial companies.” There will not be only one winning company; several can receive more funding under the plan.

Each private spaceflight project will have a project executive, a primary point of contact between NASA and the private company. That person will be assisted by administrators, including a lead engineer and a team of technical advisers. These advisers will have the ability to reach out across NASA’s offices for expertise. How many full-time project executives are involved in this hugely important task? Thousands? Hundreds? In fact, about 24.

Because this sort of relationship between NASA and the commercial sector is still new, there are no precise existing standards to apply to the work. In particular, agency planners have not yet set specific quality guidelines. “They have not published documents for vehicles to be human-rated,” Congressman Olson says. “NASA hasn’t told them what they need to do. NASA says, ‘Oh yeah, we’re getting on it.’”

Next page: Sky-high hopes

To start flying humans into space, Sierra Nevada (or any other private firm) will have to reach many milestones in development, testing, and financing. Not only do the companies need to pass NASA’s safety standards with unproved spacecraft, but they must train astronauts on the new equipment as well. Even the most optimistic estimates suggest it will be three to five years before a commercial vehicle is ready to reach the International Space Station. In other words, the United States faces the exact same gap in space access that got Sirangelo motivated to begin developing the Dream Chaser five years ago. “The shuttle will stop flying next year, and we’re not going to have a human-rated vehicle to take to station. That problem is our fault,” Olson admits.

The problem could get worse. If the commercial companies cannot deliver the vehicles on the anticipated schedule, NASA will have no back-up other than the Soyuz. Even Voss questions the timing of NASA’s sudden conversion to a free-market philosophy. “I think they made a mistake by canceling the Constellation program without having an alternative in place,” he says.

Back in the hangar outside Denver, Sirangelo crawls into the Dream Chaser. The interior is long and round, with blue walls and gray seats. At the moment, because it is just a demo, there are no windows by the passenger seats. The best view is out the windows up front, where Sirangelo plans to be sitting when the Dream Chaser makes its inaugural flight.

Yes, that’s right: One perk of the commercial spaceflight business is that the boss gets to hitch a ride without shelling out the $30 million it would cost to be a space tourist in the Soyuz. Sirangelo, whose pilot training qualifies him for the trip, figures there’s no better way to assure NASA—and the public—that the private space vehicles can really fly. “I told NASA I’m going to go up and show them it’s safe,” he says.

As Sirangelo exits the ship and climbs down the ladder in this hangar, it is a fitting echo of the moment when astronauts first descended onto the surface of the moon. In the near future the great leaps will not be on a faraway planet. They will be in a hangar like this one, where some entrepreneurs and maybe some geeks are dreaming up the next big space thing.

As for what comes next for the Dream Chaser, Sirangelo has plenty of goals in mind. His focus now is on completing NASA’s remaining milestones to get the rest of the initial funding. Sierra Nevada will then have to obtain more financing, since the company’s total budget for Dream Chaser production is estimated to be at least $200 million. Despite the skeptics, the company remains bullish on its target operational date four years from now. In fact, Sierra Nevada is mapping out a follow-up strategy, providing not only training and flight services for NASA but commercial ventures and even space tourism. Sirangelo hopes that the Dream Chaser will live up to its name, inspiring a new generation of explorers let down by the years of drift in NASA’s human space program. “When people look at the stars, there’s a huge pent-up emotion,” he says. “We want to figure out how we fit into the universe. Man needs to experience space. It can’t be all robotics.”

As Sirangelo heads back to his office, the helicopter pilot wishes him well. “Beautiful day for flying,” he says.

“Sure is,” Sirangelo replies.

The X=37 is readied for tests to verify its structural integrity during its earlier, NASA incarnation.

Boeing/R.Davis

Meanwhile, on the Dark Side...

While NASA’s plans hang in limbo, the U.S. Air Force is pursuing a new space initiative of its own. In April it launched the X-37B, an unmanned, reusable space plane. The aim of the X-37B project is secret, and the Air Force’s grander intentions remain cloaked, but some details are leaking out.

Brian Weeden, technical adviser to the Secure World Foundation (a space-development think tank), says the available information shows that the X-37B is not equipped for any sort of offensive role. And at 29 feet long, it is not big enough to carry missiles or retrieve a military satellite, either. Surveillance is the X-37B’s most likely task, and the plane’s trajectory—confirmed when amateur astronomers spotted it in a moderately inclined, 40-degree orbit in May—supports that view.Those sightings “dismissed the idea that the U.S. military was developing technology to put something into orbit undetected,” Weeden notes.

The X-37 actually began as a possible next-generation space shuttle, but NASA abandoned the project; the Air Force took control in 2006. Now the military and civilian space programs seem headed in different directions. Weeden, who used to work for the Air Force, says NASA must forge ahead with manned spaceflight, but the Air Force does not need a human presence for its purposes, such as scouting and reconnaissance. “Having people up there is just a problem,” he says. And for obvious reasons the Air Force is not prepared to turn over its launch capabilities to private firms.

“The U.S. does not have an overall space strategy,” Weeden says. Then again, the last attempt to coordinate led to the painful compromises of the outgoing space shuttle—so that might not be such a bad thing. —Andrew Moseman

Space shuttle Endeavour rolls out for one of its last flights from NASA's Kennedy Space Center.

Amanda Diller/NASA

Recycling the Old NASA

The planned end of NASA’s Constellation program—after five years and nearly $10 billion—does not mean that all of its pieces will head for the junkyard. President Obama has proposed that the Orion capsule, which would have carried crews to the International Space Station and to the moon, should stay on as the space station’s lifeboat, replacing Russia’s aging Soyuz capsule. The prognosis is foggier for the two new planned rockets, Ares I and Ares V, according to Scott Pace, director of George Washington University’s Space Policy Institute. The rockets have no future without Constellation. But NASA would be crazy to start new projects from scratch, he adds. Avionics, guidance, abort systems, and other basics from Ares could be repackaged, “even if the overall system looks quite different,” he says. The Constellation program’s dreamier proposals are not likely to see the light of day. Altair, the planned lunar lander, will be shelved, never having reached the hardware stage, Pace says. But there are solid pieces of research within Constellation that would be smart to save, such as the development of updated pressure suits. The space shuttle–era suits are bulky and ill equipped for other missions. As for the space shuttles, they will need a good home once their final missions are completed. If you have an air and space museum and $30 million to spare, give NASA a call. —Andrew Moseman